Dubai's flagship carrier Emirates reported a 72 percent drop in 2011 profits on Thursday as high fuel prices accounted for 40 percent of the Gulf carrier's costs.
Emirates made a profit of AED1.5 billion dirhams (USD$409 million) for the fiscal year ended March 31, compared to a profit of AED5.4 billion in 2010.
Revenue at the Dubai government-owned airline was AED62.3 billion dirhams in 2011, up 14.9 percent.
The airline's fuel bill rose 44.4 percent in the 2011/2012 financial year to AED24.3 billion dirhams, or 40 percent of total costs, it said.
The Arab world's largest airline said in March that it might restart fuel hedging to help guard against the high costs.
"In addition to the cost of fuel, Emirates had an operationally challenging year with the political unrest across the Middle East and North Africa affecting flight schedules," the airline said in a statement on Thursday.
Rising fuel costs and the financial turmoil in Europe are expected to impact earnings of most global carriers, the International Air Transport Association said last month.
The airline's passenger seat factor was 80 percent, in line with the prior year.
Profits for the wider Emirates Group were AED2.3 billion dirhams, including airline services arm, Dnata. Emirates paid a AED500 million dirham dividend to the Dubai government while Dnata paid AED350 million. In 2010, Emirates' dividend payout was AED2.3 billion dirhams.
Dubai has long touted its position as a travel hub and rapidly expanded Emirates.
It competes with Abu Dhabi's Etihad Airways and Qatar Airways, as the state-backed carriers look to transform the Gulf region into the new hub for global aviation.
Emirates' drop in profits is in line with competitors such as Air France-KLM, Lufthansa and Cathay Pacific.
Air France-KLM's first-quarter losses widened and Cathay posted a 61 percent drop in 2011 profit -- both hit by high fuel costs and the slowing global economy.
Gravity always wins!